Aruna of delhi sends on consignment to prema of patna goods costing 1, 60, 000. He solds goods costing 1, 20, 000 for 2, 00, 000 and failed to recover 5, 000 from one customer. Prema is entitled to 10% commission on the invoice price which is 25% above cost price and 5%(over ridding commission) of any price above invoice price. The total commission payable to prema is..

Category: Miscellaneous Indian Gk

Hint: Calculate the invoice price first, then apply the commission rates.

Correct Answer: B) 17500.0

Exam Relevance: UPSC, SSC, Bank PO, CLAT

Difficulty: Moderate

Explanations:

The cost price of the goods is 1,60,000.

The goods sold for 2,00,000.

Prema is entitled to a 10% commission on the invoice price, which is 25% above the cost price.

Prema also receives a 5% over-riding commission on any price above the invoice price.

Option Analysis:

Option A: This option is incorrect. The calculation of the commission does not result in 22,500. The correct calculation involves determining the invoice price and applying the commission rates correctly.
Option B: This option is correct. The total commission payable to Prema is 17,500, calculated by applying the 10% commission on the invoice price and the 5% over-riding commission on the price above the invoice price.
Option C: This option is incorrect. The calculation of the commission does not result in 20,500. The correct calculation involves determining the invoice price and applying the commission rates correctly.
Option D: This option is incorrect. The calculation of the commission does not result in 21,000. The correct calculation involves determining the invoice price and applying the commission rates correctly.

Mnemonic: Remember: Invoice price is 25% above cost price.